Intel's increasing focus on wireless technologies won't include the production of RFID (radio frequency identification) chips, said Intel President and Chief Operating Officer Paul Otellini Tuesday at Forrester Research Inc.'s Executive Strategy conference in Boston.

The Santa Clara, California, chip maker has invested a great deal in wireless technologies such as 802.11 and silicon radios, but any company that wants to manufacture RFID chips to help retailers and logistics organizations track products will have to make those chips with extremely low costs in order to build adoption, he said.

"We won't jump into that penny-a-chip (market)," Otellini said. "It will take a lot of units to make serious money."

Intel's role in advancing the use of specialized wireless networks such as RFID chips and sensors would be to power the servers and PCs that access and analyze the data collected by those chips, Otellini said.

Forrester's conference focused on the rise of the extended Internet, which it defined as devices and software that connect digital networks with physical assets such as inventory or distribution vehicles.

RFID chips are thought to be on track to supplant the bar code as the standard for inventory tracking, but backers of the technology have several privacy and cost concerns to overcome before that shift takes place.

Otellini addressed several aspects of the wireless world during his speech to conference attendees. He expressed support for U.S. Federal Communications Commission Chairman Michael Powell 's strategy with regards to wireless spectrum, saying that world governments should decide what spectrum is needed for military purposes, and free up the rest for commercial use.

Because the band of spectrum used by wireless fidelity devices is unregulated, the technology has become "a viral growth phenomenon," Otellini said.

Intel's work in bringing PC performance to wireless handsets will also help drive adoption of wireless standards and applications, Otellini said.

"Imagine today's 3GHz-plus Pentium 4 processors inside your handset. We're going to improve battery life and heat dissipation for you cynics out there," he said.